Three New Commodity ETFs in the Works
December 2nd, 2010 at 1:00am by Tom Lydon
Three new commodity exchange traded funds (ETFs) are in the hopper, courtesy of United States Commodity Funds.
As with the United States Commodity Index Fund (NYSEArca: USCI), the ETF will use futures with the most backwardation or least contango to mitigate contango’s negative effects on futures funds, reports Benzinga. [The Benefits Of Owning Commodity ETFs.]
Kevin Grewal on Daily Markets gives a rundown on the ETFs:
- United States Copper Fund: Will hold copper futures. Copper is forecast to experience increased demand as emerging economies such as China and India continue to industrialize. [Choosing ETFs In a Slow Growth Economy.]
- United States Agriculture Index Fund: Will track the SummerHaven Dynamic Agriculture Index, which gives exposure to 14 different agricultural commodities including soybeans, corn, soft red winter wheat, hard red winter wheat, soybean oil, soybean meal, canola, sugar, coffee, cocoa, cotton, live cattle, feeder cattle and lean hogs.
- United States Metal Index Fund: Will include futures for both base and precious metals holdings. The index that the fund is expected to track holds ten metals including aluminum, copper, zinc, nickel, tin, lead, platinum, palladium, silver and gold. Base metals, such as aluminum, nickel, tin, copper and lead are expected to witness positive demand support due to increased global economic growth.
Tisha Guerrero contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.